Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

Mill discount cap sinks stainless scrap tags

Keywords: Tags  stainless steel, scrap, scrap prices, 304 stainless, nickel, London Metal Exchange, Rey Mashayekhi

NEW YORK — Some stainless scrap prices dropped this week amid a cap on consumer mill buying discounts and as London Metal Exchange nickel prices cooled after reaching 15-month highs last week, market participants said.

AMM’s broker/processor buying prices for Type 304 solids fell to $1,835 to $1,860 per gross ton May 5 from $1,860 to $1,880 last week, and Type 304 turnings dropping to $1,660 to $1,680 per ton from $1,680 to $1,725 per ton previously.

The LME’s three-month nickel contract closed the official session at $18,525 per tonne ($8.40 per pound), down 0.3 percent from a nearly 15-month high of $18,585 per tonne ($8.43 per pound) April 28. The contract had sagged to as low as $18,070 per tonne May 1 after news that Russian nickel supply wouldn’t be affected by White House sanctions resulting from the ongoing political instability in Ukraine (, April 28).

Processor sources told AMM that lower buying prices for 18/8 material are necessary if they want to "build in a little bit of margin" in the face of consumer buying figures that have been capped by the major North American stainless steel mills.

"With both disappointing mill prices for May and declining LME nickel (prices), stainless prices are slipping back to more realistic levels," one processor source said.

"It feels like the market is in a slight correction mode ... certainly for scrap buying," a second processor source said. "You’ve got to buy scrap against a price where you can turn around and make a profit, if you want to be around for the long haul."

The second processor noted that the mills can’t expand their pricing structure. "They can’t pay more for scrap vs. the LME and survive. They’re bleeding as it is. Higher prices are not going to help their bottom line."

In the wake of escalating scrap prices, some major processors have taken to importing material from Europe in the hope of adding supply into a market that in recent months has been characterized by strong mill demand.

"If (mills) keep melting at the pace they’re melting, it’s going to get to the point where there’s not going to be enough scrap in North America," a third processor source told AMM.

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Latest Pricing Trends